Caterpillar, the global leader in heavy equipment and power systems had experienced several years of below-industry-average shareholder returns. In 2017, our firm was able to help the newly appointed chief executive and executive team refocus on profitable growth. The company systematically evaluated the market economics and competitive position of each of its businesses to identify the products, services and geographic regions that offered profitable growth potential. 

Guided by this assessment, the company withdrew resources from those businesses that could not deliver economically profitable growth and redeployed those resources to expand in those areas that could.  

The company revamped its core management decision processes and invested in an extensive management education program. As a result, a consistent management discipline now permeates from above-ground to deep within the organization.

Over six years, Caterpillar has been able to significantly grow earnings per share and improve free cash flow. Further, the corporation has now developed a reinvestment advantage that has enabled leading-edge product and service innovations.  

The strategic, operational and capital allocation disciplines that now permeate all levels of the organization, have delivered annual shareholder returns in the top quartile of its industry peers.

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